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Flextronics International Ltd (NAS:FLEX)
Beneish M-Score
-2.71 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Flextronics International Ltd has a M-score of -2.71 suggests that the company is not a manipulator.

FLEX' s 10-Year Beneish M-Score Range
Min: -6.71   Max: 1.53
Current: -2.71

-6.71
1.53

During the past 13 years, the highest Beneish M-Score of Flextronics International Ltd was 1.53. The lowest was -6.71. And the median was -2.51.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Flextronics International Ltd for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0736+0.528 * 1.0453+0.404 * 0.9239+0.892 * 1.0015+0.115 * 1.2386
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0937+4.679 * -0.0614-0.327 * 1.057
=-2.71

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $2,551 Mil.
Revenue was 7183.442 + 6410.106 + 5791.125 + 5295.318 = $24,680 Mil.
Gross Profit was 398.619 + 368.423 + 311.035 + 195.657 = $1,274 Mil.
Total Current Assets was $9,693 Mil.
Total Assets was $12,817 Mil.
Property, Plant and Equipment(Net PPE) was $2,381 Mil.
Depreciation, Depletion and Amortization(DDA) was $481 Mil.
Selling, General & Admin. Expense(SGA) was $877 Mil.
Total Current Liabilities was $8,064 Mil.
Long-Term Debt was $2,001 Mil.
Net Income was 145.157 + 118.205 + 59.257 + -49.316 = $273 Mil.
Non Operating Income was -29.486 + 0 + -39.368 + -98.698 = $-168 Mil.
Cash Flow from Operations was 764.549 + 155.182 + 198.576 + 109.373 = $1,228 Mil.
Accounts Receivable was $2,373 Mil.
Revenue was 6123.321 + 6174.841 + 5975.995 + 6369.965 = $24,644 Mil.
Gross Profit was 246.462 + 366.772 + 357.357 + 358.908 = $1,329 Mil.
Total Current Assets was $8,278 Mil.
Total Assets was $11,154 Mil.
Property, Plant and Equipment(Net PPE) was $2,175 Mil.
Depreciation, Depletion and Amortization(DDA) was $572 Mil.
Selling, General & Admin. Expense(SGA) was $800 Mil.
Total Current Liabilities was $6,430 Mil.
Long-Term Debt was $1,856 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2551.03 / 24679.991) / (2372.706 / 24644.122)
=0.1033643 / 0.09627878
=1.0736

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(368.423 / 24644.122) / (398.619 / 24679.991)
=0.05394792 / 0.05160999
=1.0453

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (9692.923 + 2380.711) / 12817.037) / (1 - (8278.043 + 2175.445) / 11153.694)
=0.05800116 / 0.06277795
=0.9239

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=24679.991 / 24644.122
=1.0015

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(572.181 / (572.181 + 2175.445)) / (481.163 / (481.163 + 2380.711))
=0.20824559 / 0.16812865
=1.2386

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(876.545 / 24679.991) / (800.287 / 24644.122)
=0.03551642 / 0.03247375
=1.0937

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((2000.694 + 8064.492) / 12817.037) / ((1856.155 + 6430.117) / 11153.694)
=0.78529741 / 0.74291728
=1.057

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(273.303 - -167.552 - 1227.68) / 12817.037
=-0.0614

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Flextronics International Ltd has a M-score of -2.71 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Flextronics International Ltd Annual Data

Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13
DSRI 1.22040.87880.86170.95081.38450.5811.35120.9140.95611.0137
GMI 1.5230.38281.21090.99281.15431.03180.81930.90711.07611.0455
AQI 1.09781.07190.98750.94280.89740.26810.54170.75021.0181.5906
SGI 1.08231.08640.97191.23321.46171.1230.77911.17971.03170.8032
DEPI 0.60671.57990.92951.13440.77690.97890.91511.38680.89870.9721
SGAI 0.95041.0310.90820.9571.00841.08031.00580.8861.06091.1423
LVGI 1.20640.97280.97920.97511.14011.46190.96970.99060.98530.966
TATA -0.0455-0.0347-0.0410.0125-0.083-0.6506-0.0733-0.023-0.0268-0.073
M-score -2.21-2.90-2.70-2.25-2.14-6.25-2.98-2.59-2.59-2.74

Flextronics International Ltd Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.81690.93440.95580.93881.00541.141.01411.14021.09831.0736
GMI 1.0421.05441.07651.03610.93770.96441.04511.10661.19011.0453
AQI 0.84250.85111.0181.38081.56311.88011.59061.22731.12110.9239
SGI 1.13161.06641.0320.94690.86720.83240.80290.84050.90881.0015
DEPI 0.99710.95590.89870.90550.93620.9090.97210.98130.99551.2386
SGAI 0.9361.01651.06171.10411.16371.11791.14161.15761.12831.0937
LVGI 0.99360.99420.98530.95920.92410.94660.9661.01371.05451.057
TATA -0.0071-0.0376-0.0256-0.017-0.031-0.061-0.071-0.0857-0.0551-0.0614
M-score -2.59-2.69-2.58-2.51-2.55-2.46-2.73-2.78-2.62-2.71
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